Increase in MTPL Tariffs Will Improve Financial Standing of Uzbekistan’s Insurers

Tashkent, Uzbekistan (UzDaily.com) — Uzbekistan’s Nationwide Company for Potential Tasks (NAPP) has introduced plans to boost tariffs and insured quantities for obligatory motor third-party legal responsibility (MTPL) insurance coverage ranging from 1 January 2026. In accordance with worldwide credit standing company Moody’s Rankings, this measure will strengthen the monetary resilience of the insurance coverage sector and represents a credit score constructive for Uzbek insurers.

In accordance with NAPP, the brand new tariffs have been calculated utilizing actuarial fashions and replicate present market situations. As a part of the reform, the insured quantity underneath MTPL insurance policies will double — from 40 million to 80 million soums.

Moody’s Rankings expects the bottom insurance coverage premiums to rise by 3.5 to 4 occasions. That is the primary revision of MTPL tariffs and protection limits for the reason that introduction of obligatory motor insurance coverage within the nation in 2019. Present tariffs stay among the many lowest on the earth and don’t cowl insurers’ precise loss exposures.

As a socially important product, MTPL is topic to strict state regulation: each premiums and payout quantities are set at ranges that considerably constrain insurers’ business flexibility.

For the reason that introduction of the present base premium — 56,000 soums (roughly $4.40) — greater than 5 years have handed. Throughout this era, inflation and forex fluctuations have pushed up automobile costs and restore prices, whereas the variety of insured occasions has additionally elevated amid speedy motorization within the nation.

Moody’s notes that MTPL accounted for lower than 5% of complete non-life premiums in Uzbekistan in 2023–2024, highlighting the product’s underdevelopment relative to total market development.

The present tariff construction doesn’t permit insurers to cowl claims bills. In consequence, MTPL loss ratios exceed 100%, with considerably larger figures in Tashkent, pointing to a critical structural imbalance. Regardless of persistent losses, insurers are required by regulation to proceed providing MTPL insurance policies.

In response, some insurers have tried to scale back losses by shifting operations to areas with decrease declare frequencies, whereas others bundle MTPL with further companies or enhanced protection to stability profitability.

However, the general unprofitability of MTPL limits incentives for its energetic promotion, hampers premium development, and distorts competitors available in the market. Consequently, shoppers face poor service high quality, together with delayed payouts and partial compensation. Moody’s stresses that the upcoming tariff enhance will allow insurers to scale back losses and lay the groundwork for the sustainable improvement of the MTPL phase in 2026 and past.